July 30, 2004

 

 

Prices of China's Livestock Products Rose in June: Prices of Beef and Mutton Stable
 

1.  Live Hog Products

Prices of piglets in China averaged RMB12.77/kg in June, registering a month-on-month rise of 8% and year-on-year increase of 64.6%. Compared to the same period in 2003, the prices showed an overall increase by more than 100% in the key production provinces of Hebei, Liaoning and Henan. Prices of piglets were higher than pork prices in these regions.

Average live hog prices rose by 4.5% from May to RMB8.64/kg in June, an increase of 50.3% compared to June 2003. Chongqing, in southwestern China, recorded the lowest price, at RMB7.37/kg, while Hainan province registered the highest at RMB10.74/kg.

Consequent to the rising live hog prices, the ratio of hog to corn price  (hog-corn ratio) has exceeded the break-even ratio of 1:5.5, registering at 1:6.13 for the past eleven months. On the whole, seventeen provinces in China registered a hog-corn ratio higher than 6.3, and four provinces with a ratio below 5.5. Compared to May 2004, twenty-eight provinces recorded a price increase. 

 

At RMB13.73/kg, China's pork prices in June registered a month-on-month rise of 4.3% and year-on-year increase of 39.3%. The lowest price was recorded in Ningxia at RMB11.67/kg, while the highest price was registered in Shanghai at RMB16/kg. Compared to May 2004, twenty-five provinces registered a price increase with the largest hike of 18.3% registered in Beijing. Compared to the same period last year, the prices rose by more than 50% in Shanxi, Hainan and Qinghai provinces.

 

Prices of live hog products in the first half-year of 2004 have remained upbeat. In particular, prices of piglets registered the sharpest hike, which was a significant departure from the downtrend in the second quarter of previous years. Except for a moderate slide registered in February this year, piglet prices have been rising since March.

 

The sharp rise in prices of piglet is chiefly attributed to the higher production cost associated with the rising prices of feed ingredients, as well as the increase in pork consumption, influenced by the bird flu outbreak in China early this year. An upward trend characterized by fluctuations is expected to persist for the short term.

 

2.  Poultry products

 

Influenced by demand and supply interplay, China's prices of poultry products had been on the rise in June. Between January and June 2004, prices of chicken eggs, live chickens and slaughtered chicken (western packaged chicken) averaged RMB6.1/kg, RMB9.75/kg and RMB9.78/kg respectively, and they registered an increase of 17.6%, 11.5% and 8.4% respectively.

 

Due to the low interest in increasing poultry inventory, prices of day-old-chicks had fallen in June. Between January and June, prices of layer day-old-chick averaged RMB1.89 per bird, a fall of 3.4% compared to the same period in 2003. Prices of broiler day-old-chick averaged RMB1.76 per bird, a fall of 1.5% compared to the same period in 2003. Prices are expected to stabilize in the near term.

 

3.  Beef and Mutton

 

Prices of mutton and beef were relatively stable in June. Between January and June, average price of beef rose by 8% from the same period in 2003 to RMB16.29/kg, while average price of mutton went up by 3.1% from the same period in 2003 to RMB16.47/kg. In the near term, prices are expected to rise amidst general market stability.

 

3.1   Beef

 

At RMB14.67/kg, beef prices in the key production regions of Hebei, Jilin, Anhui, Shandong and Henan rose by 0.4% compared to May, and fell by 10.3% compared to the national average price.

 

In the major sales regions of Beijing, Tianjin, Shanghai, Fujian, Guangdong, Hainan and Chongqing, average price of beef rose by 0.8% from May to RMB19.78/kg, a 20.9% higher than the national average price.

 

3.2  Mutton

 

At RMB16.58/kg, mutton prices rose by 1.4% compared to May, and by 4.6% compared to June in 2003.

 

In the key production regions of Hebei, Inner Mongolia, Shandong, Henan and Xinjiang, average price of mutton rose by 2.4% from May to RMB15.11/kg, an 8.9% lower than the national average price. 

 

In the major sales regions of Shanghai, Fujian, Guangdong and Hainan, average price fell by 1.2% from May to RMB22.5/kg, a 35.7% higher than the national average price.